One of the industry’s most candid speakers, Mark Ritson, visited New Zealand last week on an invitation from the Commercial Communications Council and DDB.
Long before he took to the stage, his fiery reputation preceded him and created the expectation that he wouldn’t hold back in calling out bullshit in marketing. His hour-long speech did not disappoint.
Addressing a series of ten talking points, Ritson scratched away at the PR that so often obscures the truth and revealed a number of issues facing the industry.
While exposing the shortcomings of digital advertising has long been one of his favourite pastimes, his speech extended well beyond that remit, addressing many of the factors defining the industry today.
“We are really shaking the foundations of everything,” Ritson started. “That makes for excitement, but it also makes for confusion.”
Ritson then waded into this confusion, offering his views on what marketers should look out for as they try to make their way out of it.
Here are a few of the key takeaways from his speech.
Programmatic is the future but it’s also a box of turds
Ritson is sometimes dismissed by digiphiles as an anti-digital guy, who sees no value in what digital offers. From the outset, it quickly became apparent that this isn’t necessarily the case.
“Don’t get me wrong, I think the future of all advertising, at least buying, is in exchanges,” he said as he started to speak about the programmatic industry.
The problem, for Ritson, is that getting to this stage will require the industry to first navigate through all the problems associated with programmatic.
“There’s great shit, but there’s mostly dirty shit going on.”
Quoting research from the World Federation of Advertisers, which is made up of the top 50 advertisers in the world, Ritson said marketers are only getting around 28c out of every $1 spent on programmatic advertising. The other 72c is lost to the complicated media supply chain, which sees the overall spend cut at various stages, and also to bot traffic.
“I’m old enough to remember the early 90s era where they were given a lot of shit for 15 percent media commission. They were given a lot of shit for it. But welcome to the future.”
Ritson is, however, optimistic that the industry will steadily resolve these issues, allowing for programmatic to become the media channel of choice, not only in digital but also across outdoor, television and other channels. But this will take time.
“Right now it’s the Wild West. And I use this metaphor because the Wild West became the Midwest, which was very safe and a very prosperous part of America, but it took a long time to get there.”
Marketers are probably playing with a broken bingo machine
Over the last year, we’ve seen numerous burnt with ads being placed on questionable websites. The issue became so significant this year, that a number of high-profile local advertisers suspended their advertising on YouTube and other Google sites.
“We used to spend a lot of time worrying about ad placement,” Ritson said. “All that’s gone with programmatic because we don’t fucking know where it’s going.”
To Ritson, brand safety is a big issue but he argues it’s symptomatic of programmatic under-delivering on what it promises.
“We have this vision of programmatic that it’s artificial intelligence, that it’s automated and that it’s 21st Century. But a lot of clients are now beginning to go: ‘What if it’s just a fucking broken bingo machine?’”
To explain this point, Ritson pointed to the example of JP Morgan, which conducted a digital advertising experiment after discovering that one of its ads appeared on a website called Hillary 4 Prison.
After this faux pas, JP Morgan chief marketing officer Kristin Lemkau cut the number of websites its ads were appearing on from 400,000 to 5,000 that would’ve made the cut in any of the traditional channels.
“She’s obviously chosen brand safety over programmatic efficiency, except she hasn’t. She then pointed out that since going down to one percent [of the original number] she hasn’t seen any deterioration in performance metrics,” Ritson said.
“It doesn’t make sense. It can’t make sense. This isn’t a fucking computer maximising exposure to customers. It’s bullshit. It’s bullshit. A bingo machine would work better than that.”
Brand safety was also the thread that led to the unravelling of Uber’s digital partnership with Fetch Media.
Uber had asked Fetch specifically to avoid Breitbart, but the company kept getting complaints that their ads were appearing on the site.
“When they began to look into it again, things were revealed. The places where Fetch had told them they were placing ads, they weren’t placing the ads. The places where they said they weren’t placing them, they were placing them. And when they [decided] to stop spending with Fetch, they discovered that almost all the claimed downloads and [consumer] behaviour continued because none downloads were as a result of any of the digital ads Fetch had been claiming. It didn’t make any impact at all.”
In each of these instances, brand safety caused the company to pause and then look into what was happening.
“If it hadn’t been for the pause, these companies would not have discovered what was happening. They would’ve carried on quite happily. These aren’t dumb companies… which are all discovering that hundreds of millions of dollars are all going wasted.”
Marketers need to stop trying to save the world
Alongside digital shenanigans, the other issue to extract a few obscenities from Ritson is purpose-washing: this concept that every brand needs a higher purpose to justify its existence.
“If I see one more fucking presentation where the purpose of the brand is to save the world and help puppies, I’m going to kill myself. It’s gone too fucking far. I saw one yesterday, and it made me want to puke. When did it become dishonourable to make a good product that satisfies customer needs? When did that become uncool? I’ve missed the memo.”
Ritson puts this trend down to shame, to the idea that marketers are somehow embarrassed about what they do.
“There’s no dishonour in being a marketer. Stop trying to save the fucking world and build brands that offer good products and services. No one fucking buys it except the employees.”
The problem with establishing a phoney purpose is that agencies are then forced to create ads that bring that purpose to life—and this, Ritson argues, is how you end up with an abomination like the Pepsi ad.
“That wasn’t a bad ad…That was trying to execute off a ludicrous brand purpose. Pepsi was trying to project ‘a global message of unity, peace and understanding’. The strategy was wrong. You can’t blame the agency. You can’t blame Kylie Jenner. It was a good tactic. If that's what you fucking think Pepsi is, it was on brief.”
Ritson believes that the only way to avoid this ludicrousness is for marketers to stop feeling ashamed of what they do.
“Marketers have become ashamed to be marketers. When we go to dinner parties, some of us struggle when we sit next to librarians, politicians or social workers to say, ‘You know what? I get people to buy more of my beautiful brand’. I think we’re embarrassed by that. It’s very hard to say ‘I spend my life selling sugared beverages to people’. That’s not cool. It’s much cooler to say, ‘Well, actually, I’m engaged in promoting unity peace and understanding’."
Apart from reeking of artificiality, this also dilutes the actual brand purpose, making it indistinguishable from any of a number of other brands that also claim to want to save the world.
“[Bill Bernach] said in advertising not to be different is suicidal and that’s what brand purpose is. You’re spending your bullets and time looking like everyone else.”
Attribution is often flawed
To explain this final point Ritson mapped out a hypothetical customer journey, ending with a purchase being made online.
He then explained that the problem with almost all attribution models is that they only measure what happens at the final stage when the customer goes online and clicks on the item. This approach doesn’t take into account at all what drove the customer to this point.
“I don’t believe in attribution. I think you can attribute some things but you can’t attribute others. It doesn’t work… It’s like trying to measure the tennis ball speed during an entire game.”
Ritson argues that so-called “spreadsheet jockeys” tend to measure CPM, CPC and a number of other digital metrics with great accuracy but this is only a small part of the entire journey.
“What they’re missing is the power of the tools they cannot measure. You can’t do that with a TV ad, not because it’s shit but because it’s not possible. The TV ad has a long-term goal. The TV ad is not meant to drive an immediate response. It’s not because it’s shit. It’s because it’s unmeasurable. We can’t measure the impact of some of these things immediately.”
The only way to take the whole customer journey into account is by conducting a full-scale econometrics study, which freezes moments in time and then looks back at the impact different channels had. This retrospective and comes after the campaign.
Ritson also sees a worrying trend in marketers pouring additional budget into digital marketing when CPC and CPM numbers start to drop off. Somewhat ironically, this decision could have the impact of further reducing digital metrics on account of the unseen impact that traditional media might have.
He was quick to point out that this isn’t to be taken as an anti-digital tirade, but rather as a recommendation to use all channels.
“The problem with digital marketers is that they’re just doing digital,” he said.
“We used to have this nice model where we watered the tree with emotional, non-targeted advertising and we built the brand equity. Then we’d come along with our CRM and our digital stuff and we’d pick the fruit of our labours and investment. But what’s been happening more recently is that we’ve stopped doing the watering and we’re just picking the fruit and it’s starting to have a big impact on our brands.”
Zero-base budgeting is coming
Unilever made headlines around 18 months ago with its decision to adopt zero-base budgeting. Kraft Heinz, Coca-Cola and Proctor & Gamble have all since followed suit, suggesting a broader trend toward this approach.
Ritson explains that marketing budgets are currently set on performance figures from the previous years. The finance team estimates a basic annual growth rate for the coming year and then allocates a budget from these estimates.
He argues that this approach doesn’t make any sense because you have a finance person, with no knowledge of the market or its challenges, determining the budget for the upcoming year.
“If she already knows how much you’re going to make next year, then what’s the fucking point of you? Why are you even here? Your boxes are being ticked by people who don’t believe in marketing. You’re an administrative count.”
Marketers have always had a sense of trepidation about the zero-base marketing budgets, because of the implication that this might lead to a reduction in allocated funds. However, Ritson disagrees.
“Zero-base is great. Don’t fear the zero. All the zero means is that we don’t know what we’re going to spend next year and we don’t know how we’re going to allocate the money. So, what you do instead is you do your research, you do your segments, you pick your targets, you develop your positioning in the market and you build your purchase funnel.”
Ritson says it’s about coming up with smart objectives for the business and allocating funds to each of those objectives. It’s about offering strategic input on how marketing can help to achieve—or even surpass—business objectives in a given year. Zero-base budgeting might sound scary, but it gives marketers the opportunity to share strategic input.
On that note, Ritson ended another one of his epic rampages through everything wrong with marketing.
Note: Another issue that Ritson addressed related to sexual harassment in the industry. We felt that this story deserved its own space. Click here to read his views on the topic.